Going Green: The CIO’s Role in Enterprisewide Environmental Sustainability
 By Andy Rowsell-Jones / GARTNER
Environmental sustainability—going green—makes such good business sense that it is inevitable. The CIO and IT have important roles to play in helping the enterprise exploit the operational, commercial and branding opportunities that going green offers.
Why green is gold
Going green, or environmental sustainably, is still a popular discussion topic these days despite the financial turmoil. Our politicians certainly are taking positions that vary in shades of light to verdant green, and IT vendors are touting their own green credentials. Meanwhile, consumers and citizens also are embracing green increasingly each day.
Yet there seems to be merit to the green debate. The scientific and economic evidence is compelling for supporting the need to take action. Going green represents both an opportunity and a risk. Unsurprisingly, surveys continue to show that the majority of CEOs among the world’s largest companies see green as a major issue. Almost all prudent business leadership it seems now have environmental sustainability and the low-carbon economy on their radar screens.
So what should CIOs and other IT leaders do? Enterprise management needs to become concerned about a long list of environmental impacts. These include pollution, (such as greenhouse gas, noise and fumes); use of raw materials (such as land, water and minerals); and waste-produced physical impacts and other outputs felt by neighbors. The environmental standard ISO14001 and other such standards can help in identifying problems and improving greenness.
For most enterprises, however, starting with a comprehensive approach is too advanced and overwhelming. If your enterprise is just starting its green endeavors, then energy use is a practical place to start. Not only is energy use pervasive, but it also offers great potential for realizing more immediate, short-term benefits relative to use efficiency and cost savings and reduced CO2 emissions.
Environmental sustainability is best approached as an iterative undertaking that allows for focused efforts, experiments and technological improvements in capturing value from green initiatives. From the CIO’s perspective, taking this iterative approach raises two critical questions:
- What opportunities and threats does a greening environment represent for the enterprise?
- How should IT respond to these opportunities and threats?
The CIO can play a lead role in a multi-disciplinary team of enterprise executives to improve fundamental business economics through environmental factors. IT can effectively make a real difference overall in environmental impacts and improve profits at the same time.
Focus green initiatives on areas of greatest value
Green issues impact different parts of the enterprise in three different areas: strategy, business operations and IT itself. For example, they may make certain strategies and competitive positions more or less tenable, or give rise to new ways of competing and succeeding. Green issues also may make some business operations uneconomic or—in the extreme—illegal.
To understand how green issues will affect your enterprise, assess the opportunities and threats they represent to your enterprise’s strategy and business operations.
For strategy, this means considering three elements:
- How a competitive market position can be created
- How stakeholders will be impacted, both materially and behaviorally
- How legislators and regulators will respond
For example, going green might allow the enterprise to competitively position itself as “the only low-carbon choice,” triggering more active market communications aimed at linking the enterprise to environmental sustainability.
To assess the impact on your business operations from the potential opportunities and threats created by a greening environment, consider four groups of business processes:
- Management, planning and administrative functions
- Product and service development functions
- Sales function (or in government agencies, a senior management-led scope and role discussion with political power brokers)
- Product and service delivery front-line functions
For example, the need to disclose to customers CO2 emitted during delivery might affect customers’ buying decisions and, in turn, trigger activities to reduce supply chain environmental impacts and tighten up carbon accounting.
In enterprises looking to create green capabilities, executives and CIOs face the need to extend core applications. Without these systems, executives may make decisions that are operationally efficient but environmentally ineffective. At a base level, these systems need to support:
- Accounting for environmental impacts—such as emissions, materials and recycling—just like they account for costs
- Offering different service levels or product characteristics based on environmental considerations and costs
- Managing goods and services throughout their full life cycle
- Tracking materials composition, manufacturing processes and supplier locations
- Incorporating environmental sustainability into innovation and process improvement activities
Building these requirements into enterprise systems will occur over time as business leaders and technology providers understand the operational impact of environmental sustainability. Thus, CIOs and IT executives need to start now.
Also, getting IT to think and behave greener in its own activities is essential—as a credibility building exercise and as good practice for the other stuff your enterprise needs to do. To address IT’s green issues, start by measuring them. PCs and monitors, for instance, are among the biggest problem areas. Simply turning off screensavers can significantly reduce annual CO2 emissions. Adopting new technologies works too. For example, moving from desktop PCs to centralized blade servers can reduce air conditioning and energy use considerably.
Even simply constructing business cases that have longer payback periods and are fully costed in terms of true running costs, including for energy, can help. A longer-term business case makes it possible to justify slightly higher levels of capital expenditure for a more energy-efficient and, hence, greener outcome in the end. Whereas, in a shorter-term business case, initial cost, rather than running cost, dominates.
Establish the management infrastructure to deliver green initiatives
Changes resulting from green-inspired initiatives require a decision-making mechanism to understand implications and prioritize actions for the enterprise as a whole. Three key parts to this management infrastructure are: the right roles, right approach and sound measures.
Gartner case studies research shows that enterprises use some form of coordinating body for their environmental activities—whether it is a special-purpose fund to achieve certain outcomes. For IT-only initiatives, the IT steering committee plays the role of central coordinating committee since investments need to be made and progress monitored. These roles do not need to be full-time nor generously staffed, so long as principles of cooperation and coordination are observed for initiatives.
However, organizational inertia is inevitable, especially relative to green initiatives that, although considered ‘important,’ are rarely urgent. Like in most diverse government agencies and different divisions of private sector enterprises, departmental or business unit agendas tend to dominate, dooming any enterprisewide approach to inactivity. This issue can be overcome by viewing going green as a long-term endeavor, rather than a project, and applying a systematic approach, such as Total Quality Management, Lean or Six Sigma.
As for a sound measurement system, a constant problem area that enterprises face is not the measures themselves but rather where to stop measuring. There are lots of carbon calculators that allow you to calculate your carbon emissions. Just search on ‘carbon calculator’ using your favorite search engine.
So, where should the boundary be drawn between your enterprise’s responsibility and ‘theirs’ (whoever they are)? Again, standards, such as ISO 14001, can provide guidance but are not really prescriptive. Fortunately, bodies such as The World Business Council for Sustainable Development can help you sort out the tricky details.
At first blush, this management infrastructure for delivering green initiatives represents a challenging list of prerequisites. However, in most organizations, existing management structures, decision-making processes, disciplines and techniques also can be used to deliver green initiatives—provided some central planning and coordination are achieved. Green therefore does not require much in the way of new management stuff—just the will to pursue it.
Decide how IT should respond
Aside from how the enterprise as a whole will be impacted, the question for the CIO and other IT leaders is what role IT will play in responding to the opportunities and threats created by a greening of the environment.
IT can mix and match three roles, providing a combination of services in different green initiatives or the same initiative.
First, IT can provide data gathering and analytic tools and infrastructure control. This might require modifications to existing governance arrangements to identify, prioritize and coordinate IT investments in support of green issues. Additionally, funding and resources may be required to provide tools for green performance tracking and analysis.
Second, IT can provide analytical and technical insight. This might require analytic input to understand the linkage between changes to business operations and IT’s green contribution and capabilities. Also, it might require supplementing with IT skills, disciplines and resources to support enterprisewide operational process changes as needed.
Third, IT can take managerial responsibility. This involves providing insight to expose green opportunities and threats that impact core and support business activities and augmenting IT’s skills and credibility to drive operational process changes.To determine the best role for IT, consider the initiative’s scope—whether it’s a strategy or business operations initiative, and IT’s capabilities in those areas.
Beyond scientific and social reasons, the move toward greater environmental sustainability is inevitable for all types of enterprises due to reasons of economic performance and mission fulfillment. Business leaders and management who can anticipate and understand the fundamental changes as the global economy moves toward greater environmental sustainability are best positioned to exploit the business opportunities. To this end, CIOs can serve an important role in helping their enterprises deliver and benefit from green-inspired changes.
Andy Rowsell-Jones is VP and research director in Gartner's CIO Research Group
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